Pakistan’s Fuel Shift Crisis: Why Industries Can’t Rely on HFO Anymore — And What Comes Next
By Saqib Zaidi – Chief Operating Officer, Reon Energy
For years, industries across Pakistan have relied on a delicate balance between natural gas and heavy fuel oil (HFO) to power their operations. Switching between the two was a cost-effective and familiar strategy. But in recent years, this equation has changed.
With gas supply becoming increasingly unreliable and unpredictable, industrial sectors have turned more heavily toward HFO to maintain energy continuity. According to Dawn News, the carbon levy on furnace oil is now approximately Rs2.5/liter (Rs2,665 per tonne) for FY 2025–26, and will double to Rs5/liter for 2026–27, in addition to the petroleum levy notified by the federal government—translating into substantial overheads and tighter margins.
Market research reveals that powerhouse managers currently generate power at ~Rs35/kWh from HFO. But with a Rs70,000+ increase in per-metric-ton HFO prices, this could soon exceed Rs45/kWh which is more than three times the LCOE of solar (~Rs12/kWh), and even higher than wind, which is cheaper still. While the national grid may seem like a cost-saving alternative, it is far from reliable. Frequent voltage fluctuations, load-shedding, and unpredictable outages have caused production halts, material losses, and delayed deliveries. For many manufacturers, grid reliance is simply not an option.
Some industrialists are turning to biomass, but this introduces its own uncertainties. Regional and seasonal variations impact biomass availability, and feedstock price volatility adds to financial risk. Waste-to-energy offers some niche potential, but scale, feedstock control, and cost competitiveness remain limiting factors. The industrial energy model is collapsing. The escalating cost of fossil fuels, coupled with unreliable supply, is pushing businesses to rethink their energy future.
The Case for Renewables: Zero Fuel Cost and Highly Reliable
Zero fuel cost renewable energy like solar and wind provides a powerful and sustainable alternative. Solar alone now offers LCOE as low as Rs12/kWh, and wind energy, especially in southern Pakistan, offers a powerful complement to solar in hybrid systems, enabling 24/7 generation when paired with REFLEX™ – Reon’s proprietary Battery Energy Storage platform.
But cost isn’t the only advantage. The reliability impact of energy instability is often underappreciated. For instance, a single 30-second voltage sag in a polyester factory can ruin an entire extrusion run, costing over Rs1 million in lost material and downtime. But with REFLEX™ these problems can be addressed head-on.
REFLEX™: Intelligent Energy Storage That Thinks Ahead
At the heart of Reon’s future-ready energy platform is REFLEX™, designed for industrial resilience. It doesn’t just store power—it’s a smart grid ally. With its AI-enabled control architecture and Energy Management System (EMS), REFLEX™ autonomously detects and corrects voltage dips, frequency shifts, and transient faults—issues that can otherwise cripple industrial operations.
REFLEX™ ensures seamless power during grid or generator failures, managing harmonics, ground faults, and even open-circuit scenarios without human intervention. For industries like cement, textiles, plastics & polyesters, packaging, petrochemicals and automotives—where seconds of downtime can translate into substantial loss—this level of power stability is game-changing.